Co-Op bank ordered to compensate for mortgage ageism

The Co-operative Bank has been ordered to pay compensation after turning down a 59 year old man for a mortgage extension on the grounds he was too old.

Peter Day, now 61 requested a mortgage extension in order to pay for his daughter’s wedding. Despite having three final salary pensions prepared to cover him into retirement the Co-Op Bank turned down his mortgage extension request.

The bank has now been ordered to pay Mr Day £2,000 compensation for age discrimination.

Mr Day revealed that he was appalled by Co-Op Bank’s decision to reject his mortgage extension adding: “It was clearly age discrimination as paying the money back and my current financial position were clearly no problem.”

Since the incident the bank has extended the maximum repayment age from 68 to 75. A Co-Op spokesperson said: “We apologise to Mr Day that we were unable to resolve his original complaint to his satisfaction.”

Since the Mortgage Market Review in 2014, lenders have begun to ask more questions whilst in the process of judging mortgage applications, as well as enforcing tougher affordability requirements.

These new changes have become problematic for older borrowers to secure mortgage deals that would run into retirement.

The Financial Ombudsman Service said that it felt that in this case, Mr Day was unfairly treated by the Co-Op bank. In total Co-Op paid Mr Day £500 compensation and cover the £1,389 costs Mr Day paid to move to another lender.

Speaking of the incident a representative for the ombudsman said: “We have received a number of inquiries of this kind and will look into each case based on its individual merits.”

Posted on February 3rd, 2016 in Property

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